One day after the government halved its GDP forecast, economists at Standard Chartered Bank (渣打銀行) yesterday remained optimistic, saying falling oil and raw material prices as well as closer ties with China would bolster the local economy next year.
“Taiwan has the advantage of being next to the Chinese market, which is the region’s growth driver with attractive products [to tap into domestic demand there],” Nicholas Kwan (關家明), the bank’s regional head of research in Asia, told a media briefing yesterday.
He said that Asian countries may not be immune to external shocks from the global slowdown, but finding new markets and boosting domestic demand would be the two best strategies to combat the slowdown.
He estimated that Asian economies would bottom out and recover at the end of next year or early 2010, but Asian stock markets may hit rock bottom earlier.
The bank’s Taipei-based economist Tony Phoo (符銘財) said that the local economy has been on a downward correction since the end of 2006 and was unlikely to stay down in the upcoming business cycle.
He maintained his GDP forecast at 2.8 percent for this year and 3.1 percent for next year, in contrast to the government’s latest estimates of 1.87 percent for this year and 2.12 percent next year.
He said that he believed the government’s recent stimulus measures would help put the economy back on track.
“In spite of the downside risk, we believe it is likely that the local economy would post 1 percent growth in the first half of next year,” Phoo said.
He said that record-low oil prices would help reduce costs for domestic businesses, 90 percent of which import capital goods instead of consumer products.
The bank projected that Hong Kong would post 1.5 percent GDP growth next year, down from this year’s 3.7 percent, while South Korea’s GDP may grow by 4 percent next year.
In related news, CPC Corp, Taiwan (台灣中油) yesterday announced it would lower domestic gasoline prices by NT$1 (US$0.03) a liter and diesel prices by NT$1.1 a liter, effective today. Rival Formosa Petrochemical Corp (台塑石化) will also follow suit.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
RSS